and from out are space. that is it this afternoon. the dow? well, maybe the folks down on wall street were watching the news today. it is depressing. neil cavuto always brings a silver lining to every cloud. please do that today, neil. >>neil: i am only one man but it is good we are like in washington, dc on saturday to prevent this. maybe we can stop a crash like this from happening and prevent a market like this from being a preview of coming attractions and still have time to save the country. i will do what i can. looking out for you, citizens, that is what i do, looking out for you and your money.

enough about me. back to me. contrary to what you might have heard, this election is big. the cash crunch that no one is talking about, that bigger. whoever is the president, he will face the mother of all financial storms. get ready, it is time for both parties to get a clue. >> holy "shep." i don't know there you call it a cliff but you should have spasms a year ender that could take the whole economy under when all the bush tax cuts phase out and all the automatic spending cuts kick in, a one-two punch that the most optimistic economies say will not the recovery for a loop, millions of americans

likely to lose their jobs and millions of american families likely to face thousands more in taxes. "new york times" says the cliff could be more like a slope. if congress doesn't move fast, kick the recovery or maybe the country goodbye. it is the story that no one is talking about. you have mentioned it, but we are looking at the abyss and no one is touching it. >>guest: what is amazing to me, this is the most predictable, avoidable financial crisis we have ever had in the history of this country. you are so right, if the bush tax cuts expire and all the automatic spending cuts go into play, meaning the himmation -- elimination of the a.t.m. affecting 30 million people, the tax holidays goes around, unemployment benefits go away,

it will are horrendous, 14 of 17 economists now say it will put us in a recession and if "new york times" thinks this is going to be a slope, they are dreaming. that money will come out of their checks the first of the year. we will see a slow down. i suspect we are not only going to anticipate a recession you will see a recession. you check with honeywell or j.p. morgan, everyone can see it. >>neil: i am listening to james dime from j.p. morgan setting aside $200 million plus dollars preparing for the possibility this government could blow up on december 31. what do you think happen? what i hear from congressional folk on either side of the aisle, they get a six month suspension, cooler heads prevail for the new year, whether it is president romney or re-elected

president obama. that is when they will sort this out. i think that is whistleing past the graveyard. >>guest: i totally grow. if you read bob woodward's book, you will see what went on to create some of this, back in 2011 we passed the budget control bill, you will see there was no honest political move that both sides could take. cantor wanted obamacare taken out. they wanted a de-coupling of the bush tax cuts. it was foolish. they kicked the can down the road and this time it cannot be kicked. you hear that the bush tax cuts favor the wealthy, right? let me dispell that. if the tax cuts for the wealthy are done away with tomorrow, it will raise between $678 billion and $800 billion over 10 years. guess what in if you let them expire, how about $3.7 trillion. nobody wants to talk about the

little 900-pound elephant in the room. they have created this mess. there is a way to fix it but will they put the politics aside? >>neil: the argument is they will realize as they agreed to keep the government running for a few months beyond the election many can argue they did it through smokescreens, that they will do whatever they can to avoid this. but a former c.b.o. director told me yesterday on fox business, and if you don't get it demand it, said this will be a problem because kicking the can down the road will fought reinforce investors' faith in anything of the united states but will lead to more sell offs. >>guest: there you go. that is right. four days after we passed the budget control act of 2011 we had a downgrade by moody's and s&p, now we are talking about being put peoplely on the

negative watch. what will happen with investors that do not want to put their money in? worse than that, what if they think their taxes will go from 15 percent to 25 percent? you can see a huge sell off in the stock market. that would create a lost -- a lot of uncertainty. 14 out of 17 economists say this is more critical than the european debt crisis. this should be talked about on every single news broadcast tonight but it won't be because they are talking about big bird. it is ridiculous. >>neil: you are right it is a big development. we are on it. thank you very much. >> we are not forgetting this. we are headed out there, washington, for that wipe out, to avoid it as the fiscal wave crashes down on all of us. that is indeed the fiscal wave. that is you, the taxpayer.

we will see how you do. you think you are okay. ing is okay. looking good. oops, this is so important, we will be live in washington, dc, a very special "cost of freedom" on saturday kicking off at 10:00 a.m. eastern. no one is talking about this. everyone is focused on the election. but we can mull d -- multitask here. i have done it. i can do a lunch and talk at the same time. >> the former head of the u.s. military team in libya testifying he was never able to get the number of forces needed to protect the compound where ambassador stevens was killed. the lt. colonel wood revealing security in benghazi remained a struggle the entire time he was

there. democrats trying to pin the blame on budget cutbacks by republicans. >> perhaps if there were more resources we might have had a different result. i must note, though, that while the republican budget increases the budget of the defense defendant, it slashes the budget that would have protected these diplomats. >> i might note that the funding that is currently enjoyed by the state department was voted bipartisan, one more democrat voting for the appropriations than republicans. >>neil: they are putting it on all republicans and it ain't flying well with senator graham. you have heard that. what do you think of that? >>guest: as the ranking republican on the foreign operations subcommittee that funds the state department and

that is a bunch of garbage. this is about -- you talk about the fiscal cliff being predictable, what is predictable with a lack of security in libya and militias are not dealt with, consulates and embassies will be attacked. we need to get to the real security situation? did people make a request? were they denied? why did susan rice come on national tv and say this was result of the video in did she say that based on intelligence for five days? she said it five days after the attack. she either misled the american people ignoring the intelligence or the intelligence was so bad for five days that someone needs to be fired on the intelligence side. we think this is very serious.

>>neil: we know that the ambassador was keeping a diary and was concerned about his safety and security of the compound. i don't think it is a huge leap to assume that he might have cabled the state department, words to that effect, or warning or threes to that affect. have you tried to get a hand on such cables or whether they indeed exist? >>guest: i sent a letter with john mccain asking the intelligence community to account for what they were telling the state department and i asked secretary clinton at the classified briefing, what was the security footprint there in did we have enough security? did we meet the needs of the people on the ground? did they ask for a senator legal of security? was it available to them? that is a question, how was the security footprint so inadequate? the second question, how could the u.s. ambassador to the

united nations be so wrong five days after the attack? why did she feel so emboldened to go on national tv and say this was the result of a riot that was a spontaneous event. we will never get to the truth. the people we need to testify is susan rice and the intelligence community. without those two groups testifying, we will never get to the bottom of this. >>neil: do you think the president lied? >>guest: i think he has been awol. i don't know if he lied but he should be outraged. they accused of bush not being intellectually curious and asking hard questions. where is president obama? he went to a fundraiser the day after this happened. if i were president of the united states and i found out my u.s. ambassador to the u.n. on national television told the american public something so far away from the truth i would want to know, why did you say that? what made you say that? if you had intelligence suggesting that was the case, why was it so wrong, and for so

long? i put this on obama. they swing everything. they undercut the commanders in iraq and libya is a symptom of overall greater problem, a lack of leadership by the united states. it has caught up us with in a lot areas and is denying reality. it has caught up with us in libya and someone needs to be held accountable. >>neil: i am glad you are trying to get to the bottom of this, senator. thank you for taking the time. while this first presidential debate was limited to domestic issues the vice presidential debate covers both. libya is expected to come up tomorrow in kentucky. we are live. our courage begins at 4:00 p.m. eastern. we have senator rand paul, we have congressman from south carolina, herman cain, republican senator from new hampshire. and former intelligence c.e.o.

will be with us, and former governor of california gray davis. the names that are the best in business and on politics on the one network that combines both. another edge you get from fox business network, you get foreign market reaction and our own market reaction as it happens, as they are debating. we seized on that last week, the first positive response from what turned out to be mitt romney's night and the future surge. the markets were sensing something big was going on. we were the only network that gave you that. that is called added value, my friend. that is what you get with fox business network. you are not getting it, you are really lost. you are hopelessly lost. so, get it. want it. we will make it worthwhile that you have it. >> suddenly surging, pennsylvania and the 20 electoral votes are back in play.

maybe the performance at the debate, in that state, with the governor next. [ male announcer ] eligible for medicare?

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>>neil: fox on top of mitt romney on a role keying in on the keystone state. a new poll showing him closing a double digit gap, two points from the president. this is person and ronald reagan was the last republican to win. maybe credit is, well, to this guy, republican pennsylvania governor, only one of four governors to get a grade of "a." in a new ca testimony o -- ca testimony o tax reform policies. the fine governor joining me now. governor, thank you for coming. >>guest: thanks for having me

on today. >>neil: maybe your policies are helping, but it cuts both way. i am sure you just want them to feel their lot is improving regardless of who politically benefits. why do you think the polls are narrowing? what are they discovering? >>guest: well, in regard to the polls here in pennsylvania, what i see are people that are starting to go back to work. we are slowly getting the economy moving in pennsylvania. we have growth going on in our energy sector, in our biotech sector. we saved jobs down in philadelphia with the refineries that were going out of business a year ago. there is a positive feeling that is starting, just starting. as it goes to the polls, i don't think that people in pennsylvania are happy with where we have gone in the last four years.

i believe the polls are narrowing. i tell everyone the only poll i look at is the one on november 6. but it is closer here in pennsylvania than what i have seen in other polls that have been in the national media the last few days. >>neil: why is that? i noticed your state polls saying they have a huge swing and the president not long ago was up 15 points and another 12 points and then ten points but now to be even, that tells me, either a lost independents are coming out of the woodwork or a lot of the president's supporters are switching sides. what is it? >>guest: well, i think a lost his supporters who is voted for him four years ago, either are not going to vote, they have decided they will stand on the side line or will switch over to mitt romney in this election. traveling across pennsylvania i have talked to a lot of people, democrats and independents and republicans would last time

votes for president obama and they have said they are not voting for president obama this time and they believe we need a change in washington. >>neil: you have proven at state level and i am not blowing out you smoke but i am intrigued by what you have done. this can be done. it is do-able. simplify the tax code. make it more friendly to business and individuals. you can do that. it is tough but you can do it. right? >>guest: you can do it if you have the discipline and the fiscal discipline for the state. i believe you can't spend more than you receive in revenues to the state. we are not washington, dc. we don't print money. we don't continue to add to the debt in that respect. we have to control our spending. the spending prior to me getting here had increased from $22 billion to almost $29 billion. we have reduced it by $2 billion. some of the money in the last budget before i took office was based on federal stimulus money that was one time money and is

gone. if you stick to the discipline you can only spend that which you have, you have to make real tough decisions. it is interesting to note, i always ask people who want more money for various categories in line items, well, do you want me to raise taxes? the answer is always "no," so you cannot have it both ways. i believe i made a promise we would not raise taxes as governor. we will live in our means. the best way, then, to increase revenue to the general fund is to increase the business climate to bring businesses to pennsylvania, to keep them in pennsylvania, and to see start-ups come to pennsylvania. yesterday, we are starting up new companies with the ben franklin and it is working in pennsylvania. >>neil: thank you, governor. more full time jobs as the

health care log kicks -- law kicks? >> we have to pass the bill so we can find out what is in it, away from the fog, away from the controversy. campbell's healthy request soup lets you hear it... in your heart. [ basketball bouncing ] heart healthy. great taste. mmm... [ male announcer ] sounds good. it's amazing what soup can do.

>>neil: this just in, to your health, not. i love this segment. a lot of olive garden workers could be facing this, but the parent companies of this company and lobster house are ready to cut costs ahead of the health care law kicking in. this could just be the beginning. talk about leaping. >>guest: it is ridiculous. it is obvious who would happen. you institute the law you is to pay for health care for those

working over 30 hours, what do businesses do? they have workers work 29 hours which is what we hear. or they will charge more for's that and lobster. this is how business works. politicians should have to take basic business classes before they start their terms. >>neil: they said premiums would not go up. if you get everyone covered under pre-existing conditions, bring are your children in up to age 26, the money does not come out of thin air. >>guest: it is great to have health care, this is something that maybe everyone should have, but someone has to pay for it. i don't know why you would be surprised that now workers will work less, or consumers will pay more, but, either way, companies are going do have to pass the rates on to the customers. we do not want this to happen. we do not want people working

less. that is already a huge problem. we don't want prices for food and goods and services to go up because consumers are strapped. they will consume less. >>neil: what will they do? the flip side, i heard it mentioned earlier, we could have more hourly workers, just working fewer hours. i don't see that. >>guest: i don't know how that is benefit because when you talk to people and we saw this in the labor numbers, the magical 759,000 people who were called who said they were working but did not show up on the payrolls. >>neil: and they answered the phone action 2. >>guest: so, the people, if you take both surveys at face value it mean they are working part time at home for themselves for cash, so it is all more evidence like the health care thing, that people are not having the 9:00 to 5:00 job with benefits, with a retirement plan, with vacation time. it is a part-time economy. that is what the administration

is giving us. >>neil: what is interesting, a lot of these companies who have hourly workers are the same one whose got exemptions and waivers and even request that, they are saying, well, we have to adjust. >>guest: that is how the economy works. we are having a guest on my program which is on at 5:00 p.m., the guy from white castle, do you want to stop by? right across the hall in 30 minutes. >>neil: is he bringing anything, i wonder? >>guest: i could set that up. we will ask him about the health care question but i am always going to ask if he has brought neil cavuto cheeseburgers. >>neil: not the cheese. not the cheese. is it meat? kidding. kidding. kidding. love them. you have a great show. one of the best additions to our

fine network. she is brillant but she is also fund and funny. >>guest: i could stay all day. >>neil: i have to tell you as the c.e.o.'s are dealing with the health care changes, others are raising holy hell. that 8:00 p.m. on fox business network, something this casino magnet just said could change the face of the presidential race. big stuff. osama bin laden is dead. general motors is alive. but g.m. is still struggling. fears that thousands of osama bin laden wanna bees are very much alive. say it ain't so, joe, so what are you gonna say tomorrow night, joe?

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can your hearing aid do all this? lyric can. to learn more about lyric's advanced technology, call or visit trylyric.com for a risk--free 30--day trial offer. and hear what a little lyric can do for you. lyric from phonak. life is on. >>neil: you might have heard joe biden mention it a few times on the trail. >> osama bin laden is dead. general motors is alive. >> i got a butcher -- bumper sticker for you, osama bin laden is dead and general motors is alive. >> osama bin laden is dead and general motors is alive. >> osama bin laden is dead and general motors is alive. that's a bumper sticker. it sums it up. >>neil: does it? or did one of the obama campaign

key issues go out with the department doing a 180 before the v.p. debate. it is not making the president look any stronger on his key issue, foreign policy. does it help or hurt? >>guest: it hurts. i don't biden will have some trouble when he faces paul ryan on this. the romney campaign has been making the case that president obama should have been more prepared for the attacks. the white house has not done a good job defending the president on this. >>neil: the issue is that people do not care. it was a tragedy, you can question people on what they knew or how much they knew, but it is the middle east, it is a bask case, move on. >>guest: sure, but, basically, this is now a white house on defense, mitt romney in a speech on monday, basically said the president should have done more to prevent this and now president obama doesn't get to talk about the new unemployment

rate of 7.8 percent. instead he spends the next week defending the white house on that. >>neil: that is an interesting point. on this, i always find that with candidates stepping back on this, saying i goofed, i should not have said that, will joe biden be playing the role of saying, we got that wrong, our initial reaction was wrong but our record in the middle east is blah, blah, blah. >>guest: this shows a breakdown in communication between the state department and the white house. the state department is now saying that the video had nothing to do with violence. of course, the white house was saying that for a week. why did they peddle this for a week if the state department said it never had anything to do with it in the first place? that calls into question the president's management style. >>neil: it also calls into question whether we want to spend good money after bad.

does that get slippery for paul ryan? >>guest: it could but the reason for that is the electorate is very war weary. mitt romney is making the case that we should be more involved in the middle east. that could present a potential risk for the republican ticket going forward. >>neil: thank you very much. >> here is how desperate it could be for the president. he is relying on joe biden to turn this around. ed? >>reporter: you are right. the vice president has had issues sometimes being tongue-tied the way they like to say inside the white house he is someone who shoots straight. he doesn't spin, if you will. as a result, that can get him into a little bit of trouble for being blunt. if you pick up on what erin said, the issue with libya, that is something that the vice president will likely be confronted with, as carney was

today, at the white house podium because what the state department said last night, changing the administration's account of what happened yet again, saying from very early, the state department never believed this was a protest gone awry. that does raise questions about why top officials like scan difficult and ambassador rice kept saying this was not terrorism, people believed it was a response to an antimuslim film. >> did she and you and other mislead the public because you did not want to admit there was a terror attack? >>guest: absolutely not. the president of the united states called it an act of step of after it occurred. >>reporter: the president did on september 12 say an act of terror will thought deter the united states from moving forward on a number of fronts but, half 9/11, jake carney and ambassador rice and many other officials in the administration insisted it was not terrorism but a response to the film. since vice president biden was

the senate foreign relations chairman and has a major foreign policy portfolio in the administration, this could be one of many issues to be pressed on tomorrow night. >>neil: look forward to it. thank you very much. >> we interrupt this campaign for this clip. road runner can survive these drops, and a republican senator argues we cannot. the nitty-gritty from a guy that do not involved word "acne," but encourages us to hurry. the road runner would say "beep beep." oh...there you go. wooohooo....hahaahahaha! i'm gonna stand up to her! no you're not. i know. you know ronny folks who save hundreds of dollars switching to geico sure are happy. how happy are they jimmy?

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expires tax rates and budget cuts, hop on to it. and a republican senator agrees with that. what is the right deal for you? >> not the direction that senator schumer is talking about chuck schumer has carved out a place for himself well outside the main stream arguing that this is no scenario where we can lower the marginal rates which is inconsistent with what every bipartisan group has looked at to addressing our budget problem on the tax side. the rational thing to do is to have a more pro growth sensible tax policy with lower marginal rates and offset the lost revenue by squeezing the value of deductions and write offs and loopholes. that is the way to generate revenue. to keep marginal rates as he has advocated, even, to raise them above where they, that is counterproductive for economic growth. >>neil: he is talking about

letting the bush rates expire for the richest. you argue this is not the time to do that. do you think and i know you want to see mitt romney elected, but if the president were re-elected, do you think he would say, absolutely not to that, and a lame duck session would simply be unable to push that, short of maybe getting a six-month extension if cooler heads on both sides to prevail and address this. >>guest: it is impossible to tell. i don't know what president obama is willing for two. he wasn't willing to address reforming entitlements. he wasn't willing to do tax reform. he had four years. we would have embraced an opportunity to do fundamental tax reform. the president never provided any idea that he had any interest if that. i don't know, after an election, i don't think he is going to win but if he were to win, would he be willing to do that? i suppose it is possible but i could not predict that. >>neil: senator we will be

live in washington, dc, looking at this other, you know, potential train wreck that develops before the end of the year if you do not hammer out something. is it your feeling that you will, a lame duck session might take a three or six month reprieve to hammer something out, or that this could be the sort of financial armageddon that some market-types fear? >>guest: well, first of all, we should be unpacking this fiscal cliff. there are two big discreet components and we should thing of them separately in my view the one is the massive tax increases which are devastating for our economy. on the other hand, it is modest spending cuts which are appropriate in manage any tuesday but poorly designed in that they fall disproportionately on our defense budget. i think it and important that we distinguish between those things. >>neil: they happening at the same time, though. >>guest: that is true.

>>neil: you advocate what? >>guest: what i advocate is we reengineer the content of the spending cuts. too much fall on defense. but the magnitude of the spending cuts is necessary and appropriate. we need to cut more than that. i think the economy would do just fine with $100 billion in spending cuts because of government is more than $100 billion too big. we need to avoid the $500 billion tax increase the scale of the tax hikes if nothing is done. i'm hopeful we will avoid the massive tax officer. >>neil: look forward to seeing you in person tomorrow, in kentucky. thank you very much, sir. >> and now eric and what coming up on "the five." >>eric: we will look at what is going on in benghazi and the hearings and find out what we knew, who knew what, when,

whether there is a coverup, what going on and why we are only now finding out that the white house says one thing and the state department says something completely different. we will look into that. then well turn our tables to some media bias. tomorrow night is the big vice presidential debate. we want to know why it took the "daily caller" to find out one of the moderators of the debate was a close friend of president obama 20 years ago president obama attended her wedding the we will bigg indo -- we will dig into that. neil you talked about business leaders are pushing back from president obama colleaguing steve wynn and josh welch and mr. otis and head of white castle. we will look at that and have fun with picking on bob beckel. and the woman who was attacked

for supporting mitt romney, an african-american actress. she stood her ground and she doubled down on it and we will talk about that. >>neil: thank you, eric. >> and team obama is worried now about the win, and donor sources are talking, and wait until you hear what you are saying.

>>neil: we hear the president's re-election attempt is sweating not so much because numbers on the polls show the president is falling but no one is believing the economic numbers the president is publicking. charles gasparino on the story we do not hear.

>>guest: i have a few sources, wall street games that are involved in politics and one i had a conversation with about the reaction of axelrod to the debate performance. not just that. he, of course, is the chief political guru of obama. what he has realized, david axelrod, is that it is not just the debate. the debate was a search tom of something else, that president obama has an economy that is very hard to defend and defending it in the debates where, you know, it is kind of like you cannot spin your way through. you cannot read off the teleprompter, it is hard when someone is putting it to you and ask for a definitive answer. >>neil: they are surprised he is not getting more bang for the polls with the 7.8 unemployment rate. >>guest: that is the other half. the public, because of people like jack welch, who did us all a favor, the way he put it out

there, i can tell you that the fact he came out and educated the public the numbers are manipulateed and --. >>neil: he said there are no guards there trying to hold them off. >>guest: it is a survey. and it is a very weak survey. he gave us all sort of an insight into how that is done and he did it, i think he did it in a great way to be honest. a lost my journalist friends think he did it in an inartful way. >>neil: he said it doesn't add you, you cannot have phenomenal job growth and see the unemployment rate drop the way it did so he questioned that. ing he said because there is so much "squish" in the numbers and room to guesstimate where it is, do not pay attention. pay attention to the real unemployment. that is why americans are not understanding it. they understand the real unemployment is much higher. >>neil: so when the

administration afghanistans -- administration argues that the trend is the friend --. >>guest: the trend is the opposite. people that is dropped, unemployed and those who is dropped out of the workforce brings the rate up to 15 percent. that rate, the official number, it can go down when more people drop out of the work first so that is the squish in the numbers and that is what jack welch showed us. it is difficult for team obama to defend this. the real numbers are really bad. you would think he would get a bump out of 7.8 percent unemployment, the first time it is down since 2008 since taking over. late 2008, excuse me. >>neil: he could have arrested it, it looks like a free fall. >>guest: josh welch did a great job explaining it. >>neil: now, the donors are

saying what to president obama? >>guest: i think there is not necessarily that they are backing out, but what you have is political advisors if free fall. they are starting to understand that they have a candidate that may read off the teleprompter and i am sick of the speeches, i don't get the tingly stuff up my spine and never have. what will make-or-break this election probably is not a great speech in front the teleprompter but is probably being able to talk on your feet. >>neil: like you. you never read a teleprompter. you wouldn't know what to do with it. we are down. welcome to the new "up."

hi. i'm henry winkler.

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whether better is good for you or better is still bad for you. the administration can rightly claim the data is getting better. the problem is, that doesn't mean the data is good. by and large, it is not. at this stage of the recovery, we should be looking at three times massachusetts jobs created each and every mont mon. but white house is greater for meager advances, better than no advance at all. mitt romney says we shouldn't feel that way and we shouldn't be grateful. we should be mad. he says better is not good. it's bad. it's very bad. we shouldn't settle for so-so. we should aim for gung-ho. because we're not getting it, give the president the heave-ho. it's all about your perspective, isn't it? there was a time when no president worth his salt would brag about 7.8% unemployment rate. there was a time whenever prior month of president tenure that rate had never been lower. not good, but better. that is kind of where the

economy stands now. stuck with numbers that are not great, but are marginally improving. and republican challenger who says we shouldn't be satisfied with the recovery like this, by the historical standards is positively revolting. i guess it depends where you've got things in your own head. pounded for years with numbingly bad stuff so you settle for the not as bad stuff. we're so ticked off that you just had it with being stuck. you want more, not less of more. you want a lot more. more or less. that's what this whole campaign comes down to. more or less. you got that? there will be a quiz when we're in kentucky. don't forget, the special coverage of the v.p. debate, 4:00 p.m. eastern time in danville, kentucky. 8:00 p.m. through midnight on fox business network. gauging market reaction. we're the only guys who do this. it's an intriguing read on how people literally place money on this. and get the